If this blog is going to discuss the connected manufacturing enterprise, we’re going to continue to focus on the Internet of Things (IoT). Companies are lining up at present to provide thought leadership and products/services to support IoT.

To be sure, the Industrial Internet of Things is similar, yet different than the popularized IoT from the consumer world. It is also much more robust, since we’ve been at this for years.

Michael Lynch and Richard Howells of SAP chatted with me recently to bring me up to speed with what’s happening with that company and IoT.

SAP is not a point solution company, rather it endeavors to bring all the solutions into an integrated whole. Therefore, it is quite interested in fitting automated connectivity into its portfolio of solutions.


SAP supplied some background information as a prelude to the conversation.

Supply Chain Management – While only 10 percent of industrial operations are currently using the connected enterprise, looking ahead to 2015, the next phase will be about making the cloud truly functional for your business to help streamline processes. Factories and plants that are ‘connected’ are more productive and smarter than their non-connected counterparts – those that don’t take advantage of this connectivity will start to lag behind.

Manufacturing/Automotive – Automotive companies are already starting to use IoT-enabled technology to predict faults, quickly respond to maintenance conditions and take proactive action. Through IoT there is end-to-end visibility across manufacturing operations. Companies are integrating factory-floor operations with core business processes to optimize production with real-time updates from machine data and gain predictive analytics to automate parts and consumable ordering to maximize revenue.


Here are some notes from our conversation.

We seem to be at the top of the “hype cycle.” We have been doing this for a long time considering technologies such as RFID and tracking software and the like. But what has changed are the cost of all the chips and the development of big data platforms. There are now chips in everything.

Information from the data gathered is now incorporated into the business process so that managers can make most decisions based on real-time information. Management of the business process itself will help managers run their business better.

Edge devices connected to each other can make decisions faster—say for collision avoidance systems.

Business networks will become more important—physical networks will feed into business networks.

We’re in early stages of this industrial Internet of Things. The first phase is connecting things. SAP can really participate in the second phase where companies ask how they can change and optimize the way they do business—where OT/IT converge. The third phase, the most exciting one, takes it to the next level. With more information displayed well, you can see things you never thought about. Pirelli realized that by managing tire inflation it can offer service in fuel optimization. Customers can do things they couldn’t do before.

At the manufacturing level with products such as MII and EMI, SAP is connecting asset management systems for machine health, as well as looking for deeper machine knowledge.

Connecting to business is critical. Imagine a truck with sensors, it may have 50-100 sensors, but they aren’t coordinated. But if connected and with geolocation, I can see traffic jams and do rerouting. I can see a problem with a truck and schedule maintenance. Connected logistic capability enables managers to manage large depots and hubs. Add geolocation, you can track the specific truck. You can deliver predictive maintenance and service by sending a repair person before customer even knows there’s a problem. This improves customer service. With new visibility into manufacturing, companies are capturing data and using it for reduce downtime, predictive maintenance, building analytics and enabling business solutions.

Business value

Needless to say, SAP is bullish on the IoT given the foreseeable added business value to suppliers and customers.


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